NEWMARKET CORP (NEU)·Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 net sales were $690.3M and EPS were $10.67, down year-over-year versus Q3 2024 ($724.9M, $13.79) as one-time charges from global manufacturing network optimization and softer shipments weighed on profitability .
• Petroleum Additives OP fell to $131.3M from a record $157.5M in Q3 2024 on a 4.1% shipment decline and increased technology/R&D investments; Specialty Materials OP was $6.0M on lower volumes .
• Balance sheet and cash flow remained strong: Net Debt reduced by $213.2M year-to-date, Net Debt/EBITDA down to 0.9x; quarterly dividend increased 9% to $3.00 per share payable Jan 2, 2026 .
• Strategic catalyst: completion of Calca Solutions acquisition (Oct 1) and ~$1B committed since 2024 to Specialty Materials capacity, expected to come online in 2H 2026, bolstering diversification and long-term growth .

What Went Well and What Went Wrong

What Went Well

• Strong balance sheet progress and deleveraging: Net Debt fell to $680.6M with Net Debt/EBITDA at 0.9x as of Sept 30, 2025, supported by solid operating cash flows .
• Shareholder returns and confidence: Board raised the quarterly dividend 9% to $3.00 per share; $77.2M of share repurchases in the first nine months .
• Specialty Materials expansion: closed Calca acquisition and reiterated ~$1B commitment to resilient, high-technology segment; “we have committed approximately $1 billion… to this resilient, high-technology specialty materials segment” .

What Went Wrong

• YoY contraction in core segment profitability: Petroleum Additives OP decreased to $131.3M from $157.5M on one-time optimization charges, softer shipments (-4.1% QoQ) and higher technology/R&D spend .
• Volume pressure: Shipments down 4.6% year-to-date, reflecting market softness and a strategic pullback from low-margin business, with lubricant additives weakness partially offset by fuel additives .
• Specialty Materials variability: Q3 sales/OP declined YoY ($38.2M/$6.0M vs. $59.1M/$16.0M) due to lower volumes, underscoring ongoing quarterly variation inherent to the segment .

Financial Results

Values marked with * retrieved from S&P Global.

Segment Net Sales

Segment Operating Profit

Key KPIs and Balance Sheet Snapshot

Guidance Changes

Note: Company did not issue numeric revenue or margin guidance; commentary emphasized cost control, margin management, and network optimization .

Earnings Call Themes & Trends

Management Commentary

• “The decrease in petroleum additives operating profit was primarily driven by one-time charges during the quarter, including those related to optimizing our global manufacturing network…” .
• “Since 2024… we have committed approximately $1 billion to this resilient, high-technology specialty materials segment.” .
• “We anticipate continued solid results from [petroleum additives]… We will continue to focus on cost control and margin management…” .
• “We… reduced our net debt by $213 million… driving our net debt-to-EBITDA ratio down to 0.9 times as of September 30, 2025.” .
• “We believe that the core principles… a long-term perspective, a safety-first culture, customer-focused solutions, technology-driven products, and a world-class supply chain—will continue to benefit all of our stakeholders.” .

Q&A Highlights

• The company did not conduct a live Q&A session; management provided prepared remarks and invited questions via email or phone follow-up .
• No additional guidance clarifications or estimate commentary were provided in a Q&A format .

Estimates Context

• Wall Street consensus estimates via S&P Global for Q3 2025 EPS and revenue were unavailable; NEU appears to have limited sell-side coverage this quarter. As a result, beat/miss versus consensus cannot be assessed. Values retrieved from S&P Global.
• Actuals: Revenue $690.3M and EBITDA $176.7M were reported in the earnings materials . Values retrieved from S&P Global.

Key Takeaways for Investors

• Near-term earnings were pressured by one-time optimization charges and softer shipments; expect normalization as network efficiency benefits accrue in future periods .
• Balance sheet strength and deleveraging (Net Debt/EBITDA 0.9x) provide flexibility to fund growth, sustain dividends, and absorb macro volatility .
• Dividend increase to $3.00 and continued buybacks underscore confidence in cash generation; supportive for income-focused holders .
• Specialty Materials expansion (Calca acquisition; capacity online 2H 2026) enhances diversification and exposure to resilient aerospace/defense end-markets .
• Petroleum Additives remains challenged by demand softness and tariffs; management is actively pruning low-margin business and investing in technology to defend margins .
• With no formal guidance and limited sell-side coverage, catalyst path is operational: watch shipment trajectory, mix improvements, and timing of manufacturing network benefits; dividend and deleveraging are constructive signals .
• For trading, the mix of short-term earnings pressure and positive strategic actions (dividend, acquisition) suggests event-driven flows; fundamental re-rating likely hinges on shipment stabilization and visible savings from network optimization .

Notes: 
- All non-GAAP references (EBITDA, Net Debt, Net Debt/EBITDA) follow company definitions and reconciliations provided in the release **[1282637_0001282637-25-000023_neu-20250930exx991earnings.htm:4]** **[1282637_0001282637-25-000023_neu-20250930exx991earnings.htm:8]**. 
- Values marked with * are retrieved from S&P Global.